Culture matters: Why i-mode failed

Top execs get blinded by shiny technology too

Opinion M-commerce service i-mode has been dropped by UK operator O2 and Australia's Telstra.

So how did a service, which promised to bring mobile commerce to everyone, and which raked in more than 40 million customers, fail so badly outside its home market, Japan?

i-mode seemed able to deliver the mobile revolution back when WAP was resolutely failing to generate any interest, let alone revenue, despite massive investments in infrastructure and promotion by mobile operators.

After the WAP smoke cleared, Telstra launched its i-mode service in November 2004. It was so convinced it got an exclusive five year license for the technology. O2 followed about a year later, offering four i-mode handsets in September 2005, and spending £20m promoting the technology.

Both companies were forced to maintain their existing WAP-based platforms - even though they had not yet proved profitable - so were forced to run two incompatible data networks.

i-mode is certainly the more comprehensive technology. It incorporates a billing platform that allows third parties to micro-bill users for access to content, as well as speeding development of new applications. But it was the pretty pictures and sounds that really caught the eye of executives at a time when WAP still featured silent mono graphics.

But the success of iMode in Japan can be attributed to architecture and geology rather than pretty graphics and billing systems: the way in which the Japanese live drives them towards mobile content in a way that just doesn't exist in the west.

Japanese houses consist of spaces which are multi-functional depending on what the occupants are doing. Walls may be moved around during the day, and it's extremely unlikely that a child would have its own room. Entertaining at home is also unusual - socialising is done in restaurants, bars and coffee shops.

This makes Japanese youths the perfect mobile consumers - they have no TV or computer in their bedroom because they have no bedroom of their own. In such a market it's unsurprising that internet access from a mobile phone has been so popular, and equally unsurprising that Western youth haven't proved so receptive to the idea.

What is truly amazing is that the mobile industry seems to be making the same mistake with mobile broadcast TV. In Spain, where broadcast mobile TV has had some success, TVs in the bedroom are rare, and over 40 per cent of mobile TV viewing is being done in the home. In the UK, bedroom TVs are endemic, so those 40 per cent of viewers are unlikely to boot up their telephones to watch TV.

I've attended many events on mobile TV, and seen presentations on expected markets and how the technology will expand, but I've never seen anyone talk about how many teenagers in those markets have TVs in their bedrooms.

O2 and Telstra will be rueing an expensive mistake with i-mode. Half the money spent on a decent WAP billing platform would have given them all the important functionality, but they saw the success of i-mode in Japan and thought customers were buying a technology, when in reality they wanted an experience suited to their culture. ®